What Is the FCC, and How Does it Work?

Last modified: September 14, 2018

By Stephen Lovely

When we talk about net neutrality or set-top boxes, we often end up talking about the FCC – the government agency that deals with cable companies and internet service providers. But the average American doesn't know a whole lot about how the FCC works and what, exactly, it's charged with doing. What is the FCC, and what is it for?

Like a lot of government agencies, the FCC is large and complicated. But we're going to cover some of the basics here, including the organization's general structure, how it's affected by politics, what it does (generally), and where it tends to stand on major issues like net neutrality.

What Does “FCC” Stand For, and What Is the FCC Supposed to Do?

Let's get the basic thing out of the way first: when we say the FCC, we mean the Federal Communications Commission. The FCC dates back to 1934, when an act of Congress established it to replace the old Federal Radio Commission.

The same 1934 statute established the FCC's mission as “to make available so far as possible, to all the people of the United States, without discrimination (…) rapid, efficient, Nationwide, and world-wide wire and radio communication services with adequate facilities at reasonable charges.” Of course, we don't just use radios anymore, so the FCC's mission is now understood to include television and the internet (including wireless communications) as well.

This is a pretty broad mission, but it essentially boils down to this: the FCC is a regulatory agency that's designed to make sure that as many Americans as possible have access to communications services like TV, radio, and the internet. To do that, the FCC is given powers to regulate companies directly. It can also create advisory committees to try to convince Congress to create rules and laws that the FCC can't make by itself.

The FCC is important because the communications industry isn't much like other business spaces. There's less competition and more regional monopolies. Legally, areas like this are subject to more regulation – the classic examples are utilities like water and power, which the government has a ton of power to regulate. The FCC has pretty serious regulatory powers, and it recently classified broadband internet as a utility, opening that space up to even more regulation.

How Is the FCC Organized?

The most important thing to know about the FCC's organizational structure is that it's headed up by five commissioners, each of whom serve five-year terms. One of these five is the Chairman, and acts as the head honcho – this is currently Tom Wheeler's gig. The Board oversees the entire FCC, which is subdivided into seven bureaus and 11 offices. The bureaus are divvied up by mission (for instance, there's one for consumer protection and another for regulations enforcement), while the offices are divvied up by expertise (law, technology, etc.) and provide support to all the different bureaus.

Like most regulatory agencies, the FCC is not a huge organization: it currently has a little over 1,700 employees. For reference, the EPA is about nine times larger. The FCC is also essentially self-funded, with its entire budget coming from regulatory fees (the companies stuck with those fees might object to describing this as “self-funded,” but the point here is that the money does not come from the federal budget).

How Do Politics Affect the FCC?

Let's get back to the five commissioners, because they're really the ones who set the tone and agenda for the FCC. There are some rules for selecting these commissioners: they can't have business interests in industries overseen by the FCC, and no political party is allowed to have more than three members on the five-member board.

The key thing about the commissioners is who picks them. The president gets to select the commissioners, who must then be approved by Congress. The president, naturally, tends to give his own party the maximum three slots. Since President Barack Obama chose our current batch of commissioners, the FCC's current board has a Democratic majority.

This is important, of course, because the Democrats and Republicans have some very different ideas on some of the issues that the FCC has a hand in. How much regulation is too much regulation? Should the FCC use its regulatory powers to ensure a neutral net? Without government influence, net neutrality would soon be a thing of the past, and the parties disagree on how much muscle regulatory agencies should flex.

Where Does the FCC Stand on Net Neutrality and Other Issues?

If you read the previous section, you know that the FCC doesn't necessarily stand anything for more than one presidential term. This section will cover where the FCC stands on issues like net neutrality, but remember that the 2016 election could drastically change the FCC's position on this issue by reversing the majority on the Board of Commissioners. For more on what might come under the next president, check out our net neutrality report cards for Donald Trump and Hillary Clinton.

Currently, the FCC tends to favor net neutrality. Chairman Tom Wheeler (who was appointed by President Barack Obama) was not initially a net neutrality hero, but his actions have generally pleased net neutrality activists. That's part of why Obama made our list of net neutrality allies.

The FCC has also tried to disrupt some of little side monopolies that cable companies like to create. They're not breaking up any cable giants, but they have pushed to make set-top box specs widely available so that third-party companies could start competing in that market.

The FCC has also shown a willingness to expand their power to regulate (that's not a huge shock, since regulating is what they're all about). To that end, they've reclassified broadband as a utility, expanding their regulatory toolkit in the process.

Of course, this is far from an exhaustive list of what the FCC does, and we've focused more on cord-cutting related issues like net neutrality and cable boxes. But hopefully it gives you an idea of what the FCC does, and what's at stake for cord cutters in the organization's decision-making.